Sunday, June 28, 2009

Healthcare: Krugman v. Mankiw

I prefer the spelling "healthcare" instead of "health care." Why? The OED has it as "healthcare" and somehow this compound word appeals to me way more than a two-word phrase "health care." However, I do agree that if we say "dental care" then shouldn't this be "health care?" To that question I ask, "since when has the English language been logical?" Remember GBS' comment that "ghoti" should be pronounced as "fish?"
The editors of Healthcare Quarterly have this to say to potential authors:
Note, however, that "healthcare" is one word as both an adjective and a noun.
Digressing is easy, I suppose. So, coming back back to the intent of this post, it is great fun watching from the sidelines two economists duking it out. In his business column, Greg Mankiw explained why he did not favor a public health insurance option. Mankiw's bottom line appears to be that government as a monopsony could drive away the incentives that otherwise attract growth and development in the industry:
a monopsony — a buyer without competitors — can reduce the price it pays below the competitive level by reducing the quantity it demands.This lesson applies directly to the market for health care. If the government has a dominant role in buying the services of doctors and other health care providers, it can force prices down.
To which Krugman responds rather nastily. It is nasty because he does not stick to arguing the points of the case (and there is a great case to be made for the public option) but he editorializes and calls names. Unwarranted. Krugman writes:
To act all wide-eyed and innocent about these problems at this late date is either remarkably ignorant or simply disingenuous.
A Nobel-prize winning public intellectual ought to be a better role model than this. Oh well!

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